Especially these days, all Americans should be required to take a real-world Economics course – in high school if not earlier.
I’m not talking about “Home Ec,” that throwback to women-in-the-kitchen days that (last I knew) offers some practical household skills but teaches little, if anything, about real economics.
Nor am I referring to Advanced Placement business course, the Future Business Leaders of America (FBLA) or other “egghead” courses for high-aspiration nerds (like I was in high school).
I mean a real, practical overview of economics: history, principle, cultural factors, real-life application, and core economic ideas like value, exchange, and money itself.
Because I have realized that Americans don’t know the first fucking thing about how economics work.
If we did, we wouldn’t be where we are today, mortgaged up to our asses and staring at a great big hole in our future while wondering why we can’t go back to Golden Ages of American Prosperity (specifically, the 1950s and 1990s ).
This goes double for the so-called “leaders” of our corporations and government. Hell, it goes to the tenth power for them, because if they had even a basic understanding about real-world economics, we wouldn’t be where we are. We wouldn’t have brokers who think speculation is value, CEOs who think margins are profit, stockholders who think profits can only go up, and congresscritters who think you can “reform” health care (and our economy) by requiring everyone to buy insurance whether they can afford to or not.
Economics are founded on three very simple ideas:
1. Everyone wants/ needs things they cannot provide by their own efforts alone.
2. Everyone has the potential to create things that other people want or need.
3. Everyone can trade one for the other.
Without resources – labor, materials and expertise – there are no goods and labor to trade. Without trade – the exchange of labor and/ or goods for labor, goods or trust – none of the other stuff matters. Without value – the worth accorded to property, labor and/ or trust by society at large – the rest is literally worth-less .
All the charts, graphs, trends, tricks, laws, principles, techniques, psychology, glad-handing, grandstanding, favor-buying bottom-line-inflating nonsense mean absolutely nothing without those bedrock elements.
And Americans don’t understand the first damn thing about how or why they work.
We have lost sight of the engines of economy, partially because of consumerist propaganda (read: advertising) but largely because of raw ignorance.
“Economics” is considered some arcane practice fit for power-suited mandriods with degrees out the ass but little real experience beyond alpha-male posturing. Obscured – like law – by complex codes of linguistic access (read: “complex terms you mere mortals couldn’t possibly understand!”), economic learning is reserved for people who are willing and able to jump through hoops and master secret handshakes. The rest of us are expected – or we expect – to “leave it to the experts.”
Yeah – and we see how well that idea worked out…
I guess it’s because I’ve learned the hard way how to make nothing go a long way, but after roughly three decades of working for companies who usually existed in perpetual states of financial crisis (real or invented), running my own businesses, and working all fronts of the Retail Battlezone, I remain astounded by how little practical knowledge Americans display about money, trade, resources, labor and credit.
And yes – the higher I look, the more ignorance I see.
A few years back, I worked over half a decade for a certain book-n-media chain that felt it was good business to pay its “customer service” personnel the lowest wages it could afford to pay, and then to increase the workload geometrically, cut health benefits to non-managerial staff… and THEN to expect excellent work from them in return. Oh, yes – and store profits were expected to rise each year; “failure” to exceed the previous year’s income was taken out of payroll.
Gee, what’s wrong with this picture? And how long a list do you want?
The breaking point came when I offered my then-district manager a way to save tens of thousands of dollars in wasted money per store, and proposed shifting it to payroll instead. As an employee experienced in every aspect of publishing and sales, I showed her point-by-point where the money was going, how one minor change could redirect resources, how that change would save money, and how that redirection would materially benefit the chain as a whole. She agreed that I was right, went to Corporate, and gave them my plan. Then she returned, told me, quote, “They like the situation the way it is and see no need to change it,” and then advised me to look for another job – which I did… taking six-and-a-half years of experience and a lifetime of consumer goodwill with me.
And now this company, like so many others, is facing financial problems. the solution: cut pay and lay off customer service people.
This is typical American business practice. And no, it’s not “all about the bottom line” – it actually cuts into the bottom line. The company would have been more profitable if the executives had looked, three years ago, at the proposal in practical terms of trade, value and resources. Instead, like so many executives who view “human resources” as charts and figures (not as human beings whose labor, skills and attitude fluctuate in accordance with the value they perceive being given by the company) and “profit” as abstract numerical goals (instead of a reward given by other human beings who value what the company has to offer), they chose to hold onto a business practice that actually wastes phenomenal amounts of time, work and – yes – money.
It’s not “good business” at all. It’s ignorance dressed up in gobbledegook. It’s not even good capitalism, because it costs more money in the long run than it saves in the short term.
The mythical “bottom line” is evoked for any number of counterproductive, even actively suicidal, business practices; then, when the bottom falls out (again), everyone runs around pointing fingers and going “Who could have seen this coming”? Anyone with a pulse could have seen it coming, had they only looked at what was going on. It doesn’t take an MBA in Business to recognize a practice that violates the laws of physics; it just takes a pair of eyes and the knowledge – and willingness – to see with them.
Which is why I think every American should be required to take classes in practical economics, as early as possible and as late as necessary.
Because we are all components in an economy. We all have a stake in it, and its health or illness is a direct result of our behavior.
Because our current “wisdom” obviously fails on a regular basis.
Because other cultures in our global economy are not blinded by the memory of bygone prosperity and illusory promises of more.
Because, quite frankly, without a firm grounding in real-world economics, we Americans are roadkill on the margins of this new millennium.
And there’s a real bottom line.
1 – The economic boom of the 1950s-60s came about largely because the other industrial powers were in ruins after World War II. America was spared that destruction, and had factories running at war-level footing while the rest of the world was sorting out the damage. That boom ended when other industrial powers – notably Germany and Japan – recovered their industrial bases and exceeded American quality-of-goods. A good thrashing from OPEC and national depression after Vietnam didn’t help matters, either.
Meanwhile, the 1990s boom resulted from a combination of the collapse of the Soviet Union, sudden innovations with information technology, and massive speculation in valueless illusion; that boom busted when other nations adopted the new technologies, massive amounts of American jobs were “outsourced” overseas, and reality caught up with speculation. Anyone with even a basic knowledge of history would know this already. Sadly, Americans as a whole really suck at history.
2 – As I wrote in my book Goblin Markets: The Glitter Trade: “On its own, money means nothing. A stack of burning hundred-dollar bills generates as much heat than a stack of burning toilet paper.”